Consider the following statements about lsquo Willful Defaulter rsquo 1 A willful defaulter is finan...........

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Consider the following statements about ‘Willful Defaulter’.

1. A willful defaulter is financially capable to repay and yet does not do so.

2. One who diverts the funds for purposes other than what the fund was availed for.

3. With whom funds are not available in the form of assets as funds have been siphoned off.

4. Who has sold or disposed the property that was used as a security to obtain the loan.

Which of the above statements is/are correct?

1,2&3 only

2,3&4 only

1 only

All the above

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Explanation:

According to the RBI, a willful defaulter is one who–

is financially capable to repay and yet does not do so;
or one who diverts the funds for purposes other than what the fund was availed for;
or with whom funds are not available in the form of assets as funds have been siphoned off;
or who has sold or disposed the property that was used as a security to obtain the loan.

Do you know?
•Diversion of fund includes activities such as using short-term working capital for long-term purposes, acquiring assets for which the loan was not meant for and transferring funds to other entities. Siphoning of funds means that funds were used for purposes that were not related to the borrower and which could affect the financial health of the entity.
THINK!
•SARFAESI Act, 2002